The Best Tech Stocks to Buy

Technology stocks offer investors the promise of growth in ways few other sectors can. After all, tech is synonymous with innovation, spawning new products, services, and features.

That sense of promise has elevated the markets throughout 2026, but it took a battering at the end of the third quarter when disappointing earnings results from some of the biggest players in the artificial intelligence buildout, including Alphabet GOOGL/GOOG, Amazon.com AMZN, and Intel INTC, led to massive selloffs.

“It was further evidence of Wall Street’s concerns about whether the enormous sums of money used to fund AI infrastructure will generate returns, and how soon,” says Morningstar reporter Sarah Hansen.

In the year to date, the Morningstar US Technology Index rose 20.20%, while the Morningstar US Total Market Index gained 11.77%.

The 12 Best Tech Stocks to Buy Now

These were the most undervalued tech stocks that Morningstar’s analysts cover as of Oct. 30, 2026.

1. Broadcom AVGO
2. Nvidia NVDA
3. Monolithic Power Systems MPWR
4. Arista Networks ANET
5. Sony SONY
6. Applied Materials AMAT
7. Taiwan Semiconductor Manufacturing TSM
8. ASML ASML
9. Lam Research LRCX
10. SAP SAP
11. Teradyne TER
12. Tyler Technologies TYL

To come up with our list of the best tech stocks to buy now, we screened for:

• Technology stocks that are undervalued, as measured by our
  price/fair value
  metric.
• Stocks that earn a wide
  Morningstar Economic Moat Rating
  . We think companies with wide economic moat ratings can fight off competitors for at least 20 years.
• Stocks that earn a Low, Medium, High, or Very High
  Morningstar Uncertainty Rating
  , which captures the range of potential outcomes for a company’s fair value.

Here’s a little more about each of the best tech stocks to buy, including commentary from the Morningstar analysts who cover each company. All data is as of Oct. 30, 2026.

Broadcom

• Morningstar Price/Fair Value: 0.50
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Wide
• Industry: Semiconductors

Semiconductor company Broadcom is the most affordable stock on our list of the best tech stocks to buy. Broadcom is one of the largest semiconductor companies in the world and has also expanded into infrastructure software. The stock is trading 50% below our fair value estimate of $650 per share.

Broadcom is an amalgamation of high-value, differentiated and moaty chip and software businesses. Put simply, Broadcom is a prolific generator of cash flow. It is a terrific aggregator of firms, big and small. Its ability to acquire and streamline generates strong profits and cash flow and fuels robust shareholder returns. We laud the company for its execution and operating efficiency, which build upon its large organic investment and help it to outperform its end markets organically.

In our view, Broadcom’s networking and custom chip businesses are its strongest and the primary drivers of the company’s wide economic moat and results. We expect it to retain a dominant position in merchant silicon for switching and routing applications, where we see it as best-of-breed for high speeds. We also expect it to hold a formidable position in custom artificial intelligence accelerators as it benefits from hyperscale cloud vendors building chips to reduce their reliance on Nvidia. We see Broadcom as the key secondary AI compute vendor to Nvidia as hyperscalers further pursue custom silicon to gain performance, save money, and avoid vendor lock-in.

Outside of chips, Broadcom’s software businesses sell virtualization software, mainframe software, and cybersecurity software, and we see its offerings as highly competitive. Broadcom’s focus on strategic large software customers like financial institutions, governments, and large enterprises—where it is deeply embedded—elicits steep switching costs. We also see upselling opportunities with VMware under the firm’s belt.

We expect Broadcom to grow rapidly as a result of its skyrocketing AI chip business. We believe AI is already the primary driver of Broadcom’s results. To us, an investment in Broadcom today is an investment in its AI chip and networking businesses. Outside of AI, we see more moderate growth led by VMware and non-AI networking. We expect acquisitions to still be on Broadcom’s radar, but perhaps with larger, less frequent deals. After the 2023 VMware purchase, we expect the company to focus on deleveraging for a couple of years before tapping the acquisition market again.

Read more about Broadcom here.

Nvidia

• Morningstar Price/Fair Value: 0.66
• Morningstar Uncertainty Rating: Very High
• Morningstar Economic Moat Rating: Wide
• Industry: Semiconductors

Nvidia is a leading developer of graphics processing units. Trading 34% below our fair value estimate, it has a wide economic moat rating. We think shares of this stock are worth $310 per share.

Nvidia has a wide economic moat, thanks to its market leadership in graphics processing units, hardware, software, and networking tools needed to enable the exponentially growing market around artificial intelligence. In the long run, we expect tech titans to strive to find second-sources or in-house solutions to diversify away from Nvidia in AI, but these efforts will, at best, only chip away at Nvidia’s AI dominance.

Nvidia’s GPUs run parallel processing workloads, using many cores to efficiently process data at the same time. In contrast, central processing units, such as Intel’s processors for PCs and servers, or Apple’s processors for its Macs and iPhones, process the data of “0’s and 1’s” in a serial fashion. The wheelhouse of GPUs has been the gaming market, and Nvidia’s GPU graphics cards have long been considered best of breed.

More recently, parallel processing has emerged as a near-requirement to accelerate AI workloads. Nvidia took an early lead in AI GPU hardware, but more importantly, developed a proprietary software platform, Cuda, and these tools allow AI developers to build their models with Nvidia. We believe Nvidia not only has a hardware lead but also benefits from high customer switching costs around Cuda, making it unlikely for another chip designer to emerge as a leader in AI training. Nvidia’s expansion into networking has been impressive, allowing customers to cluster AI GPUs together for AI training.

We think Nvidia’s prospects will be tied to the AI market, for better or worse, for quite some time. We expect leading cloud vendors to continue to invest in in-house, while AMD is also working on GPUs and AI accelerators for the data center. However, we view Nvidia’s GPUs and Cuda as the industry leaders, and the firm’s massive valuation will hinge on the pace of AI buildouts in the years ahead.

Read more about Nvidia here.

Monolithic Power Systems

• Morningstar Price/Fair Value: 0.69
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Wide
• Industry: Semiconductors

Next on our list of the best tech stocks to buy is Monolithic Power Systems. Monolithic Power Systems is a power chipmaker specializing in voltage regulators. The stock is trading at a 31% discount to our fair value estimate of $1,750 per share.

Monolithic Power Systems is a disruptor in the power management chip market, using its proprietary process technology to differentiate from larger competitors. In our view, MPS differentiates from larger incumbents via its unique fabless model, with which it develops advanced manufacturing processes that integrate many functions on a single chip to offer a smaller form factor and greater energy efficiency to its customers. We believe revenue growth far above its largest competitors shows that its differentiated approach to power management is gaining traction in the market and that MPS is taking market share.

MPS has intangible assets from its innovative chip designs and advancements in manufacturing that carve out a wide economic moat. We think power chip incumbents are likely to continue serving a wide array of end customers with lagging-edge, in-house chip manufacturing, rather than directly competing with MPS’ design prowess and quick time to market. Like its larger rivals, MPS benefits from high customer switching costs once its chips are designed into end products, especially in end markets with long product lifecycles. We think MPS’ asset-light fabless model will allow it to extract high returns from a low invested capital base, even as competition attempts to fend it off.

We expect MPS to focus on organic top-line growth across all its end markets and to continue outgrowing other power chipmakers as it takes market share. We think MPS will experience its most rapid growth in data centers as it benefits from artificial intelligence investment. We also expect high growth for sales into cars, where it is moving up the value chain and winning designs for advanced driver-assist systems and electric vehicle drivetrain and battery sockets. We also think rising volumes will help expand operating margin to a strong level in the 40% range longer-term. Finally, we expect MPS will continue investing heavily in advancing its process technology and aggressively marketing its differentiated approach to maintain its higher-than-market growth.

Read more about Monolithic Power Systems here.

Arista Networks

• Morningstar Price/Fair Value: 0.73
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Wide
• Industry: Computer Hardware

Arista Networks is a networking equipment provider that primarily sells Ethernet switches and software to data centers. Arista Networks is an affordable tech stock, trading at a 27% discount to our fair value estimate of $230 per share. The computer hardware company earns a wide economic moat rating.

We view Arista Networks as the technology leader in high-speed switching for enterprise networking. We expect Arista to maintain its high market share at the highest speeds and for it to augment its share in lower speeds and campus applications where it has historically been less penetrated. In our view, Arista’s software gives it a structural and durable competitive advantage over competitors in winning new customers, both in the cloud and in the enterprise. We believe this software-led approach provides the firm with a wide economic moat.

Arista’s performance at high speeds and its software-led approach set it apart from other networking equipment providers. Its Extensible Operating System gives customers a highly programmable and modular solution that can scale up and down for networks of any size. Arista has forgone the proprietary hardware-plus-software lock-in approach of Cisco in favor of utilizing cutting-edge merchant silicon and focusing on software development, which allows the firm to offer top-tier performance at a competitive price point. We think its software focus has generated significant intangible assets and embeds it deeply with customers.

We believe Arista will see durably high growth from surging spending toward artificial intelligence. AI networks require the highest speeds available to train and infer upon models using many GPU clusters talking to each other. We believe Arista’s strong position in high-speed switching will make it a meaningful beneficiary of AI spending. We forecast AI to become a primary driver for the firm over the next five years.

Arista is looking to expand from its high-speed cloud heritage into the larger (and in our opinion, slightly stickier) enterprise market. Arista first established itself in the most cutting-edge applications for hyperscalers, but we believe its modular software approach will prove attractive for smaller enterprises building out private clouds or on-premises data centers. Finally, we expect Arista to maintain an excellent profit profile, even with a robust research and development budget maintaining its intangible assets and its ability to exact pricing power.

Read more about Arista Networks here.

Sony

• Morningstar Price/Fair Value: 0.74
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Wide
• Industry: Consumer Electronics

Sony Group is a conglomerate with consumer electronics roots, which not only designs, develops, produces, and sells electronic equipment and devices, but also is engaged in content businesses, such as console and mobile games, music, and movies. The firm earns a wide economic moat rating and the shares of its stock look 26% undervalued relative to our $34 fair value estimate.

As technologies and consumer preferences change rapidly, it is generally difficult for consumer electronics companies to build an economic moat. The replacement cycle for digital appliances is usually four to six years, but as most products are commoditized, it is difficult for manufacturers to build an ecosystem that prevents customers from switching to other brands. As a result, Sony’s profitability in electronics has been unstable in the past, while its music, movies, and financial-services businesses have generated solid results.

Over the past decade, Sony has transformed its business model to enable more solid and stable growth by reducing the volatility of the consumer electronics business and by aggressively investing in acquiring content for its entertainment businesses such as music, movies, and games.

In the consumer electronics business, profits are generated from digital cameras and audio equipment, where Sony has strengths, while the TV business is thoroughly focused on avoiding losses by focusing on premium products and strictly managing inventories.

In the music and movie businesses, Sony has been able to seize growth opportunities, such as the expansion of the streaming market, by expanding its content and exploring new artists.

The image sensor business has the largest global market share. The majority of sales come from the mobile market, which is benefiting from the strong demand for improved image quality in smartphone cameras. However, unlike the entertainment businesses, image sensors require high capital investment and research and development, and with such high fixed costs, we believe the profitability of the business is not high enough.

PlayStation is Sony’s largest revenue-generating business. While user migration from PS4 to PS5 is progressing well, rising game development costs and competition from other platforms such as Steam are becoming a concern for the business.

Read more about Sony here.

Applied Materials

• Morningstar Price/Fair Value: 0.75
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Wide
• Industry: Semiconductor Equipment and Materials

Applied Materials is the largest semiconductor wafer fabrication equipment manufacturer in the world. The company earns a wide economic moat. Shares of the stock look 25% undervalued relative to our $520 fair value estimate.

Applied Materials is the largest supplier in the world of wafer fabrication equipment for semiconductors. It holds the broadest portfolio, in our view, which we think should enable it to maintain its leading market share. In our view, Applied Materials’ breadth in chip manufacturing gives it stickier inroads into customers by selling integrated solutions across technologies. We expect Applied Materials to grow at a mid- to high-single-digit pace over the course of market cycles as it benefits from trends toward more complex chips in the long term, including gate-all-around transistors, advanced packaging, and artificial intelligence.

We assign a wide economic moat rating to Applied Materials, stemming from immense capabilities in cutting-edge chip manufacturing and steep switching costs for customers. Applied Materials is the only WFE provider to compete meaningfully in all three market segments of etch, deposition, and process control, going toe-to-toe with more-specialized competitors like Lam Research and KLA. We believe Applied Materials’ market-leading research and development budget—more than $3 billion annually—generates substantial intangible assets and fuels the company’s ability to win and maintain customers across these three distinct segments, in part with its integrated solutions. We also see the complexity of Applied Materials’ equipment and its embedded services business as sticky. In our view, its competitive advantage enables the company to earn strong profit margins and robust cash flow.

We expect results to be prone to semiconductor market cyclicality, but we believe Applied Materials will achieve growth over the long term. Its sales are a function of global chip volume and overall chip complexity, and while we see cyclicality in the former, we see durable growth for the latter. We are monitoring geopolitical risk affecting Applied Materials via export restrictions between the US and China, but we see most of these restrictions as baked in, and see low risk for restrictions on non-cutting-edge chip equipment. We like Applied Materials’ significant shareholder returns funded with its heady cash flow.

Read more about Applied Materials here.

Taiwan Semiconductor Manufacturing

• Morningstar Price/Fair Value: 0.76
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Wide
• Industry: Semiconductors

Taiwan Semiconductor Manufacturing is the world’s largest dedicated chip foundry, with about 70% market share in 2025. TSMC is an affordable tech stock, trading at a 24% discount to our fair value estimate of $534 per share. The semiconductor company earns a wide economic moat rating.

Taiwan Semiconductor Manufacturing is the world’s largest dedicated contract chip manufacturer, or foundry, with over 70% market share as of mid-2026. It makes integrated circuits for customers based on their proprietary IC designs. TSMC has long benefited from semiconductor firms around the globe transitioning from integrated device manufacturers to fabless designers. Like all foundries, it assumes the costs and capital expenditures of running factories amid a highly cyclical market for its customers. Foundries tend to add excessive capacity during times of burgeoning demand, which can result in underutilization during downturns, which hampers profitability.

The rise of fabless semiconductor firms has supported the growth of foundries, which in turn has encouraged increased competition. However, most of these newer competitors are confined to low-end manufacturing due to prohibitive costs and engineering know-how associated with leading-edge technology. To prolong the excess returns enabled by leading-edge process technology, or nodes, TSMC initially focuses on logic products, mostly used on central processing units and mobile chips, then focuses on more cost-conscious applications. This strategy has been successful, illustrated by the fact that the firm is one of the two foundries still possessing leading-edge nodes while dozens of peers lag.

We note two long-term growth factors for TSMC. First, the consolidation of semiconductor firms is expected to create demand for integrated systems made with the most advanced nodes. Second, organic growth of artificial intelligence, Internet of Things, and high-performance computing applications may last for decades. AI and HPC play a central role in quickly processing human and machine inputs to solve complex problems like autonomous driving and language processing, which accentuates the need for more energy-efficient chips. Cheaper semiconductors have made integrating sensors, controllers, and motors to improve home, office, and factory efficiency possible.

Read more about TSMC here.

ASML

• Morningstar Price/Fair Value: 0.76
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Wide
• Industry: Semiconductor Equipment and Materials

ASML is the leader in lithography systems for manufacturing semiconductors with 90% market share. The firm earns a wide economic moat rating and the shares of its stock look 24% undervalued relative to our $2,050 fair value estimate.

We believe ASML will remain the top lithography equipment provider in semiconductor foundries for the next two decades. TSMC, Intel, and Samsung redesigned their fabs a decade ago to make them suitable for extreme ultraviolet lithography, a costly and long endeavor, so it is quite unlikely that ASML will be displaced from its place in the foundry. In addition, no competitor has yet matched ASML’s technological leadership, and we don’t see this happening in the next 10 years. The company’s competitive advantage should keep expanding as it increases its already-high EUR 6 billion research and development budget.

ASML is an assembler, sourcing the highest-quality parts from suppliers to build its lithography machines. This allows the firm to maintain cost flexibility, which we view as key in a cyclical industry like semiconductors, and creates gross margin stability. ASML has a solid supply chain management strategy: Although some critical parts, like its mirrors, are single-sourced from Carl Zeiss, it has never had any major disruption.

Despite the high price tag of machines, especially for EUV, ASML provides value to customers by bringing down the cost per wafer through increased machine output. This focus is crucial, as customers need to see a return on investment when they spend EUR 200 million-EUR 300 million on a single lithography machine. Even if the absolute price of a machine increases, it will still be accretive to foundries if it reduces the cost per unit. Fabs operate 24/7, so total cost of ownership is what matters most.

ASML’s machines can last for up to 30 years. The firm sells equipment at an attractive gross margin but then keeps generating recurring service revenue for decades. ASML’s EUV machines are more complex than the previous deep ultraviolet generation, meaning higher potential for service revenue. Management expects to increase service margins in the next decade as it focuses more on this segment and launches more-complex machines with more service upselling potential. Software and hardware upgrades are also high-margin, although these can be more cyclical, since the foundry needs to stop production to implement them.

Read more about ASML here.

Lam Research

• Morningstar Price/Fair Value: 0.77
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Wide
• Industry: Semiconductor Equipment and Materials

Lam Research is one of the largest semiconductor wafer fabrication equipment manufacturers in the world. Trading 23% below our fair value estimate, Lam Research has a wide economic moat rating. We think shares of this stock are worth $310 per share.

Lam Research is one of the largest providers of wafer fabrication equipment for semiconductors, and we believe its strong portfolio should enable it to maintain and increase its large market share. Lam historically was weighted to memory chipmakers, but has gained significant share in logic chip equipment, and we expect it to be more in line with peers’ exposure in the future. In our view, Lam will benefit from broadly increasing chip complexity over the long term, including advanced packaging, new transistor architectures, and high-bandwidth memory capacity expansion. In the short term, we expect immense growth as chipmakers race to build out more supply for AI infrastructure demands.

We assign a wide economic moat rating to Lam, underpinned by strong chip manufacturing expertise and steep customer switching costs. Lam holds a dominant market share in etch and a strong competitive position in deposition. We believe its large research and development budget, at more than $2 billion annually, creates immense design prowess for WFE and is to credit for its impressive market share. We also think the complexity of its equipment and its embedded services are very sticky. We see Lam’s moat resulting in pricing power that drives strong profit margins and good cash flow.

We expect results to vary with the cyclicality of the semiconductor industry longer-term, but see supernormal growth over the next few years from AI demand. The firm’s sales are a function of global chip volume and overall chip complexity, and AI is raising the pace of growth of both. Trends toward rising layer counts in 3D NAND chips, high-bandwidth memory DRAM chips for artificial intelligence, gate-all-around transistors, and advanced packaging will drive demand for Lam’s equipment and revenue growth through cycles, in our view. We also expect services to smooth out lumpier equipment sales.

We monitor for further geopolitical risk affecting Lam via export restrictions between the US and China, but see much of this risk having already manifested and is now baked into results. Finally, we like Lam’s significant shareholder returns funded with its heady cash flow.

Read more about Lam Research here.

SAP

• Morningstar Price/Fair Value: 0.78
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Wide
• Industry: Software—Application

Founded in Germany in 1972 by former IBM employees, SAP is the world’s largest provider of enterprise application software. Trading 22% below our fair value estimate, SAP has an economic moat rating of wide. We think shares of this stock are worth $302 per share.

SAP is the world’s largest provider of enterprise application software and global market leader in enterprise resource planning software. The company earns revenue by selling subscriptions for its various cloud-based software-as-a-service products as well as licenses and maintenance fees for on-premises software, which are now being largely phased out. Besides its core ERP products such as S/4HANA, SAP offers well-known back-office software products such as Concur for travel and expense management and Ariba for procurement.

The company was late to the cloud for ERP software but now offers two compelling products: RISE with SAP, which is the private-cloud edition designed for SAP’s large enterprise customers that are transitioning from their SAP on-premises ERP (ECC) to SAP S/4HANA; and GROW with SAP, which is the public cloud edition that is designed for midmarket companies with less complex requirements. We think GROW with SAP fills an important void in SAP’s product offering, as previously SAP’s ERP software was often unattractive to smaller customers given the implementation costs were just too high. With the launch of these new products, cloud revenue is growing swiftly, and SAP is capturing many new midmarket customers.

SAP is following a land and expand strategy, which is common in the enterprise software market. RISE with SAP and GROW with SAP are the land products, after which the company then upsells and cross-sells more SAP products to these customers, which is much easier in a cloud-based model. The company has yet to release its latest long-term ambitions but expects revenue growth to accelerate at least through 2027, along with rising margins as the cloud business reaches efficient scale.

Read more about SAP here.

Teradyne

• Morningstar Price/Fair Value: 0.78
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Wide
• Industry: Semiconductor Equipment and Materials

Teradyne provides testing equipment, including automated test equipment for semiconductors, system testing for hard disk drives, circuit boards, and electronics systems, and wireless testing for devices. The firm earns a wide economic moat rating and the shares of its stock look 22% undervalued relative to our $350 fair value estimate.

Teradyne is a heavyweight supplier of automated test equipment for semiconductors, boasting market-leading capabilities that run the gamut of chips. It is one of two companies worldwide that can produce testers for the most cutting-edge semiconductors, thanks to robust engineering talent across hardware and software and a structural lead in organic investment. The firm is a vital partner to chipmakers across the industry and has impressively strong relationships with Apple and Taiwan Semiconductor. Teradyne’s market leadership exhibits itself in terrific margins, strong returns on invested capital, and a high market share. We give the firm a wide economic moat rating.

Beyond its top-tier capabilities, we think Teradyne is a strong operator. It has found a good balance between organic investment in development and profitability, and it is a good generator of free cash flow. We also applaud Teradyne’s strong balance sheet, which shows a net cash position.

We expect Teradyne to see strong growth in the medium term but to experience cyclical headwinds in the longer term, given its exposure to the semiconductor market. In semiconductor testing, Teradyne will benefit from increasing complexity, specifically the expansion of advanced memory capacity and advances in new architectures and smaller geometries in digital chips, such as 3-nanometer platforms and gate-all-around transistors. We also expect domestic onshoring and capacity expansion to generate demand for the firm’s automated test equipment in the medium term. We see artificial intelligence driving both of these trends.

Teradyne has historically been tied to the smartphone market cycle but has increasingly benefited from AI spending. We expect Teradyne to see strong growth stemming from AI, with good exposure to high-bandwidth memory, or HBM, and custom AI accelerator customers, along with rising potential for meaningful share gains at Nvidia. We think the firm’s collaborative and autonomous robots will augment top-line growth over the next five years, and we don’t see this segment reducing organic investment in the core chip business.

Read more about Teradyne here.

Tyler Technologies

• Morningstar Price/Fair Value: 0.79
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Wide
• Industry: Software—Application

Software application firm Tyler Technologies rounds out our list of best tech stocks to buy. Tyler Technologies supplies software and services to state and local governments, courts, schools, and federal agencies. The stock is 21% undervalued relative to our fair value estimate of $500 per share.

Tyler Technologies holds an attractive position in government software, where replacing essential systems is difficult and modernization can take many years. We expect its installed customer base to support continued growth, but the investment case increasingly depends on converting that base to cloud services and improving delivery efficiency.

The cloud strategy is sensible. Governments gain managed infrastructure and more frequent updates, while Tyler replaces maintenance fees with larger subscription contracts. Management illustrates subscription revenue of roughly 1.7 times the maintenance fees replaced. Part of that increase pays for hosting and operations previously handled by the customer, so it is not all additional profit. Standardizing software versions and moving clients onto shared infrastructure should improve the economics over time.

Execution will determine the pace. Tyler is using incentives and plans to curtail support for older products to encourage migration. Large contracts can materially improve bookings, but implementation schedules delay revenue recognition. We expect conversions, new customers, and additional applications to sustain growth beyond annual price increases.

Payments provide another opportunity as more government services move online and Tyler connects transactions to its operating software. A Texas contract’s wind-down demonstrates renewal risk, although lower processing fees cushion the profit impact.

Artificial intelligence can help understaffed agencies process documents and handle resident requests. Tyler’s existing customer relationships offer a practical route to adoption, but we do not yet view AI as a major independent revenue driver. Management expects meaningful revenue from new AI tools that perform tasks no earlier than the second half of 2027.

We expect earnings to outpace revenue as the cloud business scales. Management’s 2030 goal of a non-GAAP operating margin in the mid-30s is plausible, but depends on delivery savings and AI-enabled efficiency while product development and sales investment continue

Read more about Tyler Technologies here.

How to Find More of the Best Tech Stocks to Buy

Investors who’d like to extend their search for top tech stocks can do the following:

• Review Morningstar’s comprehensive list of tech stocks to investigate further.
• Stay up to date on the tech sector’s performance, key earnings reports, and more with Morningstar’s tech sector page.
• Read Morningstar’s Guide to Stock Investing to learn how our approach to investing can inform your stock-picking process.
• Use the Morningstar Investor screener to build a shortlist of tech stocks to research and watch.